EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0510726
Customs Act 1901
Background
Part XVA of the Customs Act 1901 (the Act) sets out a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (the CEO). A lower rate of customs duty applies to goods that are the subject of a TCO.
Under section 269F of the Act, a person may apply to the CEO for a TCO in respect of goods. If the CEO is satisfied that the application is not in respect of goods specified in section 269SJ of the Act, which sets out those goods that cannot be subject to a TCO, the CEO must decide whether the application meets the core criteria.
Section 269C of the Act provides that a TCO application meets the core criteria if, on the day on which the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B of the Act provides that ‘goods produced in Australia’ has the meaning given by section 269D, ‘ordinary course of business’ has the meaning given by section 269E and ‘substitutable goods’ in respect of goods the subject of a TCO application, means goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use (including a design use) to which the goods the subject of the application can be put.
Subsection 269P(3) of the Act provides that if the CEO is satisfied that a TCO application meets the core criteria, the CEO must make a written order (a TCO) declaring that the goods the subject of the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) specified in the order applies.
Bluescope Steel applied for a TCO in respect of certain Hydraulic Power Return Oil Filter on 16 August 2005.
Instrument
TCO No 0510726 was made on 28 October 2005. It declares that those certain Hydraulic Power Return Oil Filter are goods to which item 50 of Schedule 4 to the Tariff applies since the CEO was satisfied that no substitutable goods were produced in Australia. The general rate of duty on these goods is 5%. The rate of duty for the goods subject to the TCO is 0%.
Consultation
Subsection 269K(1) of the Act provides in part that as soon as practicable after accepting a TCO application as a valid application, the CEO must publish a notice in the Gazette which includes an invitation to any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. The CEO did not receive any submissions in response to this invitation.
Commencement
Subsection 269S(1) relevantly provides that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged TCO No. 0510726 is taken to have come into force on 16 August 2005.
The TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities on a person (other than the Commonwealth) in respect of anything done or omitted to be done before the date of registration. The rights of importers will be beneficially affected. Under paragraph 126(1)(r) of the Regulations, importers of such goods will be able to apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force. The TCO does not impose any liabilities on any person.
Overview
The Tariff Concession Instrument No. 0510726 was enacted in 2005 under the Customs Act 1901 to address the issue of applying tariff concessions to specific goods that are not produced in Australia and for which no suitable domestic alternatives exist. The Act, overseen by the Parliament of Australia, aims to provide relief to industries and consumers by reducing customs duty on certain imported goods, thereby promoting fair competition and economic efficiency. The Tariff Concession Order (TCO) process allows the Chief Executive Officer of Customs to grant concessions based on applications that meet specific criteria, such as the absence of substitutable goods produced in Australia. This particular TCO, applied to Hydraulic Power Return Oil Filters, exemplifies the policy objective of lowering the customs duty from 5% to 0%, thereby benefiting importers and potentially stimulating demand for these goods.
Scope and Application
The Tariff Concession Instrument No. 0510726 under the Customs Act 1901 applies to goods specified in the instrument, namely certain Hydraulic Power Return Oil Filters. This legislation pertains to the reduction of customs duty on these goods, which is administered by the Chief Executive Officer of Customs (CEO). The scope of the Act includes the consideration of Tariff Concession Orders (TCOs) for goods that are not produced in Australia in the ordinary course of business and do not have substitutable goods produced domestically. The instrument is effective from the date the application was lodged, which is 16 August 2005, and is taken to have come into force on that date. The geographic reach of this legislation is national, applying across Australia under the Commonwealth’s jurisdiction. There are no exclusions or exemptions specified within this particular TCO, though the Act does provide for the exclusion of certain goods from TCO consideration under section 269SJ. The instrument may be extended or restricted through subordinate instruments, but this specific TCO applies solely to the Hydraulic Power Return Oil Filters as declared.
Key Provisions
The Tariff Concession Instrument No. 0510726, made under the Customs Act 1901 (the Act), establishes a concession for certain Hydraulic Power Return Oil Filters, reducing the customs duty rate from 5% to 0%. This instrument is the result of an application submitted by Bluescope Steel on 16 August 2005, and it was approved by the Chief Executive Officer of Customs (CEO) on 28 October 2005 (sections 269F, 269C, 269P(3)). The application was processed in accordance with the Act's provisions for Tariff Concession Orders (TCOs), which require that no substitutable goods were produced in Australia at the time the application was lodged (section 269C). The TCO is applicable to goods specified in item 50 of Schedule 4 to the Customs Tariff Act 1995 (Tariff).
The obligations imposed by the Act on parties include the requirement for the CEO to consider whether a TCO application meets the core criteria, which involve ensuring that no substitutable goods were produced in Australia in the ordinary course of business (section 269C). Once the CEO is satisfied that the application meets these criteria, they are mandated to make a written order (section 269P(3)). Furthermore, under section 269K(1), the CEO must publish a notice in the Gazette inviting any interested parties to submit their views on why the TCO should not be granted. In this case, no submissions were received, allowing the TCO to proceed without objection.
In terms of potential breaches and consequences, the Act does not explicitly outline specific offences or penalties for failing to comply with the TCO provisions. However, any party who imports goods under the TCO without meeting the stipulated conditions may face penalties for incorrect or fraudulent declarations, which could include fines or other legal repercussions as outlined in the Customs Act 1901 and associated regulations. The Act ensures that the rights of non-Commonwealth persons are protected, meaning that the TCO does not impose any new liabilities or disadvantage any party in respect of actions taken prior to the TCO's effective date (subsection 269S(1)).